Last week, Davidson Town Commissioners approved a change to Section 5 of its Planning Ordinance amending its Inclusionary Housing requirement, which REBIC believes is illegal under North Carolina law.

Currently, the Town of Davidson requires that builders and developers set aside 12.5% of housing units in all new developments as affordable. Of those affordable units, at least 30% must be available for those earning less than 50% of Area Median Income (AMI). No more than 70% can be available to those earning 50-80% of AMI and no more than 20% can be available to those earning 80%-120% of AMI. Under the old language, builders could provide a payment of $26,550 in lieu of building just the most affordable units. The new language allows a payment to be made in exchange for building any required affordable units.

The move came as the result of the threat of legal action against the town. Under current law in North Carolina it is illegal for local governments to impose IZOs. We are only aware of two towns that currently do it in spite of the prohibition – Chapel Hill and Davidson. By passing the text amendment, the Town avoided a potentially protracted legal battle with a developer who threatened to take them to court over the ordinance.

Nearly two months ago, the text amendment was brought before the Planning Board where it was overwhelmingly voted down. At the time, several Board Members said the language was inconsistent with the Comprehensive Plan. Staff supported the change and brought it to the full Commission. It was adopted unanimously on a 4-0 vote. Commissioner Rodney Graham asked that he be recused from the vote because he is a small custom builder and the language change would likely benefit him financially in the future.

If you have any questions or would like additional information, please contact Rob Nanfelt, REBIC Government Affairs Manager, at rob.nanfelt@REBIC.com or (720)771-3825.